Refurbs are an option on lots of durable products, including drilling rigs. Well, Elburn, Ill., drilling equipment supplier Rig Source Inc. recently contacted National Driller about an extensive refurb project on an Atlas Copco RD20. We thought readers might like to hear about how Rig Source helped give a second life to an idle rig, turning it around for shallow oil and gas work in Indonesia in a matter of weeks, so we called Matt Slater, director of sales, to hear all about it.
Q. What was the scope of this refurb?
A. We had a customer contact us who was looking for more than just an RD20. They wanted the entire package with all the ancillary equipment. We located the right package for them and then took the customer to go see it. We purchased the equipment, brought it here and went through exactly what our customer needed as far as refurbishing the equipment.
Some of the equipment had been sitting for a while and needed to be brought up to date. In addition to being brought up to date, it had to pass — Indonesia has pretty strict regulations on their equipment that we needed to adhere to in order to pass their importation laws.
The total package included the drill, mud system, substructure with a pipe handling system, doghouse and drill pipe.
A. In our experience, customers want shallow rigs to be extremely mobile for getting in and out of small areas while also leaving the smallest footprint. They are also looking for a compactable rig to simplify transportation. Fewer shipping containers make it much easier to track during transport. The RD20 fits this bill perfectly.
Q. What’s the most challenging aspect of bringing a rig like this back to as-new condition?
A. Meeting the country import regulations for equipment was the biggest challenge. We had to go as far as getting API (American Petroleum Institute) certification, which meant having third parties here to inspect everything. Atlas Copco was fantastic on supplying us all OEM parts. A lot of the other refurb that was done on the mud system, doghouse and substructure was work that our fabricators are very experienced with.
Q. Had your client set out specifically for an Atlas Copco RD20? Or was it a matter of availability, with the RD20 from Canada meeting their requirements?
A. They really wanted an RD20 for two reasons. First off, the specs and the size of the rig were right, and secondly, because Atlas Copco has an office in Indonesia. The customers knew they could get the support from us to get the whole package together and started, followed by the fact they would have local support from Atlas Copco in Indonesia.
I think it was a very smart decision. … We ship units all over the world, but if you don’t have any kind of local support it makes it a little difficult in the drilling industry. This is something which I’m sure most people are familiar with, but there is nothing worse than having to wait a few weeks for a part.
Q. This particular rig had been idle for a year and a half. Can you talk a bit about what that meant for the refurb process?
A. Not only was it sitting idle, but it was sitting idle in western Canada. So, with the harsh winter weather conditions, we had a lot of work to do. We checked all the hoses, all the gauges and all the wiring.
We went through and changed all the gauges in the control panel and changed any fittings and hoses that needed to be brought up to date. After going through those items we went through the engine services, in addition to checking all the hydraulics on the unit. It was a low-hour unit, so making sure that we could bring it back to as close to as-new as possible was our goal. To date, the rig’s been working [in the field] for quite some time and as far as we’ve heard it’s only needed basic, routine maintenance.
Q. What year was this rig made? Did that factor into the refurb?
A. The rig itself is a 2006, so it was quite a few years old when we purchased it. I don’t believe the year factored into the refub as much as the immediate parts availability, which contributed to our success.
Q. This rig was bound for Indonesia. Can you talk a bit about the conditions this rig will work in, and how that might have factored into the refurb?
A. It went from one extreme in Canada to another extreme in Indonesia in just a matter of a few years. There weren’t any special requirements based on the climate it would be working in. … The most important thing was going over it with a fine-tooth comb and doing everything that we could to make sure that it was a good, working rig knowing that it was going to rather remote locations.
Q. Before leaving Rig Source, this RD20 got a couple third-party inspections. First, can you talk about the API inspection, what they looked for and how this RD20 performed in their review?
A. The inspectors did a very thorough job and checked all of the welds on everything weight bearing. The certification was API Specification 4F. The same thing had to be done on the substructure. They had to check all the welds on the tower, the frame itself and anything that was load bearing. … Everything passed with flying colors.
I believe the previous owner had lowered the substructure without removing one of the safeties — one of the rests that held up in case the hydraulics failed. This was corrected and we rebuilt the majority of the substructure so everything passed the certification with no problem.
Q. The RD20 also got a look over from an Indonesian inspector. What kinds of things were included in that inspection?
A. They came in to see the setup and make sure that it was safe. The rod loading system was a prerequisite because they didn’t want anyone handling anything. With it being one of the first RD20s into the country, they also wanted to get the proper documentation on the 4F certification.
Even this one, with the extensive work we did, still came in at half the price of new. That’s a great deal when you consider you’re getting a rig that’s been completely inspected, updated with OEM parts and worked on extensively.
Q. Talk a bit about the value proposition for refurbs like this. The math definitely works for a bigger rig like this, but how does it work for more entry level rigs or less powerful rigs for other markets?
A. Even this one, with the extensive work we did, still came in at half the price of new. That’s a great deal when you consider you’re getting a rig that’s been completely inspected, updated with OEM parts and worked on extensively. Now factor in that a project like this only took us about six weeks. I’m not quite sure what lead times are right now for new equipment, but I’m pretty positive they’re a lot longer than six to eight weeks.
Another benefit is that the time frame to get started is a lot better. With the way the market is right now — especially in shallow oil and gas, it’s more cost effective to get up and running with a used unit. Or, just to maintain some of the older units that are in your fleet, as opposed to replacing them with new. Even if you’re not considering replacing your older rigs, you could benefit from having your unit inspected, updated and refurbished if time permits. This should significantly reduce your down time going forward and will earn you more money in the long run with the rig’s greater efficiency.
Q. Can you talk a bit about the variety of rigs that you guys handle, as far as refurbs?
A. A lot of the units that we refurb are in the geotech and environmental market. Right now we are redoing five CME rigs while also working on remounts. We consistently refurb top brands such as these CMEs, Diedrich and Mobile — in the geotechnical vein. We also do a lot of Geoprobe drill refurbishments.
The Indonesia rig was the largest rig that we have completed to date, which has opened the door to where we can refurbish anything from your much smaller geotech/environmental rigs, up to your larger shallow oil and gas rigs.
Q. Does this reset the lifespan for a rig like an RD20?
A. Absolutely. Obviously, a lot of that is going to be dependent on the engine. That’s going to be the one thing that, hours-wise, is always going to have to be replaced at some point. But these are hydraulic rigs and so much of it is dependent on that hydraulic system. Going through and making sure that’s up to date and making sure it’s functioning properly, you’re going to drastically extend the working life of these rigs. To say that they reset back to new, I don’t know if I’d go that far, but you definitely are extending the life of them quite a bit.
Q. After all of Rig Source’s hard work, this RD20 was shipped overseas. Can you talk about the logistics involved in sending a rig of this size overseas?
A. Almost everything has to be shipped roll-on, roll-off. Every piece of the rig shipped out of the Port of Houston. We ship equipment just about everywhere, but lately we’ve had shipments to Africa, Australia, Indonesia, Laos and Vietnam. We had to ship a few additional container loads with the drill pipe and the odds and ends as well. We had to have a crane service, both as the units were coming in and leaving, to load the trucks. … We’ve used the same logistics company for quite a while to go ahead and do all of our ocean freight and we have a high level of confidence in their service.
… Any time you ship overseas the paperwork and customs is always tricky and rather interesting to make sure you have everything done properly. There’s no doubt about it, it’s always an ordeal and something always comes up. With this shipment six pieces went RO-RO along with five containers and everything went smoothly.